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1) Terms of trade: No downward trend – with global demand growth and finite supply, prices likely to stay high

2) Instability of international commodity markets (large swings in world market prices): Oil prices subject to large swings – but with prices hovering around $50 per barrel at the moment, oil one of the most profitable natural resources

World Bank (2005) warns: ‘the temptation to use interventionist measures for quick but unsustainable results, e.g. creating state entitiesand administrative mechanisms to foster the goal of diversification and competitiveness’ should be avoided (p. 19)

The lack of transparency in cash flows of some financial and industrial groups and their illegal enrichment through hiding profits, transfer of capital and property abroad, tax evasion and shadow economy are becoming serious hindrances to our development. Their representatives are the ones who are shattering the air with empty calls to support the fight against corruption. At the same time, this is exactly where major losses of the budget are hidden. It is time to move from words to actions.”

- Nursultan Nazarbayev, ‘Annual Message to the people of Kazakhstan’ (2006)

Seymour Hersh (2001):

Via intermediaries (like James Giffen, left), American oil corporation Mobil (now part of ExxonMobil) had paid the Kazakh government an amount exceeding one billion U.S. dollars, which President Nazarbayev then deposited in Swiss bank accounts

OSI 2003: earnings from the oil windfalls should be spent on a public investment program ‘to improve infrastructure, access to health care and education, and the investment climate for small and medium-sized enterprises’

Redistribution: regional differences in these redistribution patterns, i.e. central and southern oblasts (e.g. South Kazakhstan, Almaty, Aqmola) benefit the most while northern regions, which are equally poor, receive less official transfers